Seven Seas Sailboats Company manufactures 100 luxury yachts per month

A compact media center is included in each yacht. Seven Seas Sailboats manufactures the media center in-house. The company is considering the possibility of outsourcing the production of the media center in order to close down some of its facilities and reduce administrative costs. At present, the variable cost per unit is $275, and fixed costs are $39,000 per month. Assuming the company outsources the production of media center and the fixed costs could be eliminated entirely, at what contract cost would outsourcing pay off for Seven Seas? (Round to the nearest whole dollar.)
A) at any cost lower than $390 per unit
B) at any cost lower than $275 per unit
C) at any cost lower than $765 per unit
D) at any cost lower than $665 per unit

D .D)
Savings in variable cost (100 x $275 ) $27,500
Savings in fixed cost 39,000
Total savings on outsourcing $66,500
No. of yachts manufactured per month 100
Contract cost ($66,500 / 100 ) $665